There is a broad consensus, not only in the United States but in most of the world, that if you are in an economic downturn, you need to stimulate. Germany seems to be an exception.
Interpretation
Economic downturns require stimulus to recover, though Germany's approach differs.
The quote by Joseph Stiglitz emphasizes the general agreement worldwide that stimulating the economy is essential during downturns. It highlights that while many countries support economic stimulus measures to counteract recessionary trends, Germany's unique stance showcases an alternative approach to managing economic challenges.
In practice
In a discussion about international economic policies, this quote can highlight differing approaches.
Free migration within Europe means that countries that have done a better job at reducing unemployment will predictably end up with more than their fair share of refugees. Workers in these countries bear the cost in depressed wages and higher unemployment, while employers benefit from cheaper labor.
I don't think we can have democracies that work where most of the people are not benefiting economically, where most of the people are worried about their job security.
Let me put it very forcefully: No large economy has ever recovered from an economic downturn through austerity. It's not going to happen in the United States, and it's not going to happen in Europe.
What separates developing countries from developed countries is as much a gap in knowledge as a gap in resources.
One of the arguments I make for the failure of the euro is that, at the time it was being constructed, there was a 'neo-liberal' ideology which said that all we need to do to make this thing work is to get deficits low, keep inflation low, and take down barriers, and then everything would be fine.
Trump sees the world in terms of a zero-sum game. In reality, globalisation, if well managed, is a positive-sum force: America gains if its friends and allies - whether Australia, the E.U., or Mexico - are stronger. But Trump's approach threatens to turn it into a negative-sum game: America will lose, too.
We ought to be opening up our borders to skilled labour from all parts of the world because [the state of the world is as follows: ] if we were to do that we would increase the supply of skilled workers that our schools have been unable to create and as a consequence of that we would lower the average wage of skills and reduce the degree of income inequality in this country.
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.
The recurrence of periods of depression and mass unemployment has discredited capitalism in the opinion of injudicious people. Yet these events are not the outcome of the operation of the free market. They are on the contrary the result of well-intentioned but ill-advised government interference with the market.
Our financial system is driven by a giant marketing machine in which the interests of sellers directly conflict with the interests of buyers.
China adopted a capitalist system in the 1980s, and they went from a 60% poverty rate to 10%.
Long-term unemployment can make any worker progressively less employable, even after the economy strengthens.
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